Press Release: Statement by IMF Managing Director Dominique Strauss-Kahn at the Conclusion of the Asia 21 High-Level Conference in Daejeon, Republic of Korea
July 13, 2010
Press Release No. 10/290
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement today at the conclusion of the Asia 21 high-level conference, which was held on July 12-13, 2010 in Daejeon, Republic of Korea:
I said at the beginning of this conference that Asia’s time has come to play a leading role in the global economy, and our discussions over these two days have reaffirmed that view. I would like to pay tribute to the Korean Authorities and express the IMF’s deep appreciation for their partnership and support. In particular, I would like to thank Finance Minister Jeung-Hyun Yoon, Bank of Korea Governor Choongsoo Kim, and Oh-Seok Hyun, President of the Korea Development Institute, as co-hosts. Let me also thank those, from students to high-level officials, from Asia and beyond, who came to Daejeon--and, of course, the people of Daejeon themselves for their kindness and hospitality.
In terms of our overall conclusions, I would highlight the following:
• Asia has shown remarkable resilience during the global financial crisis and has emerged as an economic powerhouse that is leading the global recovery. There are important lessons for other regions. In particular, the extensive reforms undertaken over the past decade have been critical in helping to protect Asia from the full brunt of the crisis—as demonstrated by Korea.
• Looking to the future, Asia has begun to build a “second engine of growth”—based on investment and consumption--beyond its clear strength in exports. Given that some of Asia’s major trading partners—in particular Europe and the U.S.—are entering a period of lower growth rates, the need to nurture Asia’s domestic demand over the medium-term has become even more crucial.
• Asia’s low-income countries have the potential to become the next generation of emerging markets. While major challenges remain in terms of poverty and inequality, many of these countries are building economic, financial, and social policies to foster sustainable growth and development.
• Asia’s increasing regional cooperation, and integration helped the region withstand the crisis. Asia will benefit from even further intra-regional policy coordination that is underway.
• Asia is playing an increasingly important role in global economic policy making, including via the G-20, which Korea is leading and which includes six Asian nations. As Asia’s economic weight in the world continues to rise, its representation in the international financial architecture must rise accordingly.
At the beginning of the conference, I also expressed the hope that it might serve as a platform for a renewal of Asia’s relationship with the IMF. We spoke frankly about the lessons we at the IMF have learned from the Asian Crisis, and how they have changed the way we work. We also engaged in a serious debate about how the IMF can better partner Asia. Our discussions have helped in the shaping of a set of deliverable follow-up actions that, I believe, will significantly strengthen the Asia-IMF relationship in the future. These “Daejeon deliverables” include:
• We will work to make our analysis more useful and available to our Asian members. This includes strengthening our early warning systems, sharpening our focus on cross-border spillovers, and increasing our work on cross-cutting themes, including macro-financial linkages. We will strive for an even-handed approach to surveillance, which will enhance the effectiveness of the IMF's policy advice. We will serve a broader Asian audience through increased outreach activities, such as recent launch of the World Economic Outlook and Global Financial Stability Report Updates in Hong Kong.
• We will strengthen the global financial safety net and, in doing so, we are working closely with Asia—through Korea’s leadership on this issue in the G-20. Listening to Asia’s voice will help us ensure that its needs will be better reflected in the way the safety net is constructed. We are examining several options to strengthen our tools to help prevent crises and mitigate systemic shocks, including more tailored crisis prevention facilities and multi-country approaches. These tools would usefully complement countries’ own efforts at insuring themselves against shocks, and may also include cooperation with regional financing mechanisms.
• We will support the further strengthening of Asia’s role and voice in the global economy. This can be done, first of all, by building on the package of 2008 reforms which boosted Asia’s voting power in the Fund, and we are working on a second stage to be completed by the G-20 summit in Seoul in November. In addition, the Fund will strengthen its collaboration with regional organizations in Asia—and, as a first step, Asia will be represented at a major meeting on this issue that we are organizing in October 2010.
I emphasized during the conference that ours is a two-way relationship. My hope is that, over time, Asia will see the IMF as an institution which truly represents the region’s interests—indeed as its “second home.” I am confident that the conference will serve as an important step in this direction. Again, I thank all those who contributed to this positive outcome over the last two days in Daejeon.”
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